Industrials

• Pasona (2168.JP) is a long investment opportunity due to its ownership of a majority stake in Benefit One (2412.JP), which is the subject of a bidding war between M3 (2413.JP) and Dai-Ichi Life (8750.JP).
• Potential bids for Benefit One could result in a significant cash windfall for Pasona, estimated at around 50% more than its current enterprise value, as well as an operating business valued at an additional 50% of its current EV.
• With the founder of Pasona being 71 years old, the bidding war could lead to a management buy-out or a substantial return of capital program for the company.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Despite this pattern persisting for years, there has still been a significant price impact each time it surfaces. Therefore, we should pay attention to the upcoming CB conversion schedule.
• A consistent observation is that the price impact is most significant at the announcement of early redemption requests.
• The anticipated announcement dates for the forthcoming early redemption requests are: around May 20th (195th conversion), around September 20th (196th conversion), and around March 20th of next year (197th conversion).

• Nidec reported a solid set of quarterly numbers, except for another huge structural loss in its EV business. 
• Nidec saw sales growth and operating profitability improvements in all other segments
• We continue to think that Nidec is attractively priced at under 20x EV/ EBIT given structural growth drivers

• Until the “parent-subsidiary (affiliate) listing” is resolved, the value of parent company isn’t  usually reflected. If Keisei has some business interest in holding OLC shares, it’s responsible for explaining it.
• If OLC shares were mostly sold, there’d be nothing left for Keisei, which couldn’t find strategy for using cash, so the decision of not losing the growing affiliate isn’t bad.
• This small sale is to buy time until a clear growth strategy is found, but once the ratio of foreign shareholders exceeds 1/3, building time will likely become more difficult.

• Lasertec has dropped more than 20% in the past week and a half, but is still selling at more than 60x EPS guidance for FY Jun-24.
• Weak orders at ASML, disappointing guidance from TSMC and doubts about Intel’s equipment purchases cast doubt on Lasertec’s growth potential.
• Between December 2021 and June 2022, Lasertec’s share price dropped by more than 50%. Wait for Q3 results before reaching for a falling knife. 

• We are reiterating our Buy rating, $8 price target and projections for urban-gro with the company reporting 1Q24 (March) results after the close on Tuesday.
• We believe, given the timing of the initial guidance (March 28th), management will achieve 1Q results and reiterate initial 2024 guidance of revenue over $84 million and positive Adjusted EBITDA. Further we expect continued positives in terms of backlog and the potential for closed environment agriculture (“CEA”) to eventually shift into a positive driver.
• Given prior quarterly misses, we believe “making” guidance will be considered a positive by investors, and we look forward to urban-gro hopefully moving on the offensive later in 2024 as their integrated business model captures further cannabis and non-cannabis market share.

• Pasona (2168.JP) is a long investment opportunity due to its ownership of a majority stake in Benefit One (2412.JP), which is the subject of a bidding war between M3 (2413.JP) and Dai-Ichi Life (8750.JP).
• Potential bids for Benefit One could result in a significant cash windfall for Pasona, estimated at around 50% more than its current enterprise value, as well as an operating business valued at an additional 50% of its current EV.
• With the founder of Pasona being 71 years old, the bidding war could lead to a management buy-out or a substantial return of capital program for the company.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Despite this pattern persisting for years, there has still been a significant price impact each time it surfaces. Therefore, we should pay attention to the upcoming CB conversion schedule.
• A consistent observation is that the price impact is most significant at the announcement of early redemption requests.
• The anticipated announcement dates for the forthcoming early redemption requests are: around May 20th (195th conversion), around September 20th (196th conversion), and around March 20th of next year (197th conversion).

• Nidec reported a solid set of quarterly numbers, except for another huge structural loss in its EV business. 
• Nidec saw sales growth and operating profitability improvements in all other segments
• We continue to think that Nidec is attractively priced at under 20x EV/ EBIT given structural growth drivers

• Until the “parent-subsidiary (affiliate) listing” is resolved, the value of parent company isn’t  usually reflected. If Keisei has some business interest in holding OLC shares, it’s responsible for explaining it.
• If OLC shares were mostly sold, there’d be nothing left for Keisei, which couldn’t find strategy for using cash, so the decision of not losing the growing affiliate isn’t bad.
• This small sale is to buy time until a clear growth strategy is found, but once the ratio of foreign shareholders exceeds 1/3, building time will likely become more difficult.

• Lasertec has dropped more than 20% in the past week and a half, but is still selling at more than 60x EPS guidance for FY Jun-24.
• Weak orders at ASML, disappointing guidance from TSMC and doubts about Intel’s equipment purchases cast doubt on Lasertec’s growth potential.
• Between December 2021 and June 2022, Lasertec’s share price dropped by more than 50%. Wait for Q3 results before reaching for a falling knife. 

• We are reiterating our Buy rating, $8 price target and projections for urban-gro with the company reporting 1Q24 (March) results after the close on Tuesday.
• We believe, given the timing of the initial guidance (March 28th), management will achieve 1Q results and reiterate initial 2024 guidance of revenue over $84 million and positive Adjusted EBITDA. Further we expect continued positives in terms of backlog and the potential for closed environment agriculture (“CEA”) to eventually shift into a positive driver.
• Given prior quarterly misses, we believe “making” guidance will be considered a positive by investors, and we look forward to urban-gro hopefully moving on the offensive later in 2024 as their integrated business model captures further cannabis and non-cannabis market share.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the June 2024 index rebal event.
• According to our estimates, there are currently no expected index changes for the T50 index.
• However, there could be five changes for the T50 and one of the expected DELs  Bizlink Holding (3665 TT) could also be deleted from the TDIV index. 

Ceres Power Holdings’ innovative technology uses electrolysis to produce green hydrogen and solid oxide fuel cells to generate power. In a year where it moved to the Main Market of the London Stock Exchange, it recorded revenue growth of 13% and gross margin expansion to 61% (the highest in the sector, according to management), but is yet to record an operating profit (FY23 operating loss of £59.4m versus £54.0m in FY22). Ceres continued its strategy to drive innovation and technology across solid oxide fuel cells (SOFC) and hydrogen electrolysers (SOEC), increasing its R&D spending by 11% y-o-y to £54m (FY22: £48.5m). Management guides for FY24 revenue to be double that achieved in FY23, based on existing contacts. Net cash, including short term investments, was £140m at the end of FY23.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the June 2024 index rebal event.
• According to our estimates, there are currently no expected index changes for the T50 index.
• However, there could be five changes for the T50 and one of the expected DELs  Bizlink Holding (3665 TT) could also be deleted from the TDIV index. 

Ceres Power Holdings’ innovative technology uses electrolysis to produce green hydrogen and solid oxide fuel cells to generate power. In a year where it moved to the Main Market of the London Stock Exchange, it recorded revenue growth of 13% and gross margin expansion to 61% (the highest in the sector, according to management), but is yet to record an operating profit (FY23 operating loss of £59.4m versus £54.0m in FY22). Ceres continued its strategy to drive innovation and technology across solid oxide fuel cells (SOFC) and hydrogen electrolysers (SOEC), increasing its R&D spending by 11% y-o-y to £54m (FY22: £48.5m). Management guides for FY24 revenue to be double that achieved in FY23, based on existing contacts. Net cash, including short term investments, was £140m at the end of FY23.

• ASPs remain under pressure as STO, J&T gain volume share in ground segment
• March showed a surprising slowdown in pace of international volume growth
• We believe Q423 and Q124 company-level profitability will mostly disappoint

• ASPs remain under pressure as STO, J&T gain volume share in ground segment
• March showed a surprising slowdown in pace of international volume growth
• We believe Q423 and Q124 company-level profitability will mostly disappoint

• Pasona (2168 JP)will pay out 10-20% of the extraordinary gain from the Benefit One (2412 JP) sale. It will take its sweet time doing so. For no apparent reason.
• Hang Lung Properties (101 HK)‘s first-ever scrip dividend provides the means for the Chan Family to indirectly chip away at minorities. 
• Hollysys Automation Technologies (HOLI US) accountant resignation announcement is a nothing burger. An  update on PRC regulatory approvals would be welcome about now though. 

• Our analysis suggests container rate momentum remained +ive in March
• Despite higher fuel expense, core container margins likely rose Y/Y in Q124
• Our L/S pair trade? It’s worked, a little, but Evergreen shares have stayed firm

• Pasona (2168 JP)will pay out 10-20% of the extraordinary gain from the Benefit One (2412 JP) sale. It will take its sweet time doing so. For no apparent reason.
• Hang Lung Properties (101 HK)‘s first-ever scrip dividend provides the means for the Chan Family to indirectly chip away at minorities. 
• Hollysys Automation Technologies (HOLI US) accountant resignation announcement is a nothing burger. An  update on PRC regulatory approvals would be welcome about now though. 

• Our analysis suggests container rate momentum remained +ive in March
• Despite higher fuel expense, core container margins likely rose Y/Y in Q124
• Our L/S pair trade? It’s worked, a little, but Evergreen shares have stayed firm

• KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
• We expect up to four changes in the KOSPI 200 index during the June 2024 index rebal event (down from 5 expected last month)  based on the latest available data.

• The prospect of this IPO mirroring the post-listing rallies seen with Ecopro Materials is what keeps local institutions fixated on this IPO despite valuation issues.
• The key factors are speculative trading frenzy among local retail investors and subsequent passive inflows through early entry into KOSPI 200/MSCI Standard.
• Considering two factors is vital. Hyundai Marine Solution’s IPO size is twice Ecopro Materials’, potentially limiting speculative buying. Sector-wide rallies, crucial for Ecopro Materials, haven’t been as prominent in shipbuilding.

Carr’s Group has announced an updated strategy that offers the potential for value realisation and creation from a number of avenues. These include: value realisation of the Engineering Division; the ability to significantly reduce central costs; and longer-term value creation in the Agriculture Division as a focused business with recovery potential and a strategy to leverage its strong market positions for growth.

• Kondotec Inc (7438 JP) is a wholesaler of construction materials in the same league as companies such as Okabe Co., Ltd. (TSE PRM: 5959).
• In FY03/23, sales amounted to JPY75.4bn (+14.1% YoY), operating profit came to JPY4.4bn (+21.2% YoY), recurring profit was JPY4.6bn, and net income attributable to owners of the parent was JPY2.4bn.
• Kondotec Inc. announced changes to its lineup of representative directors (a change of president).

• ASGN Incorporated recently held its fourth quarter and full year 2023 earnings call.
• The company reported solid results for the fourth quarter with revenues, gross margin and adjusted EBITDA margin all landing at the upper end or above their respective guidance ranges.
• The annual revenue for 2023 amounted to approximately $4.5 billion, $2.4 billion of which was attributed to commercial and government IT consulting work.

• Sensata Technologies fourth quarter and full year 2023 earnings revealed several key points investors may consider.
• With growth in electrification revenue by approximately 50% year-over-year to $700 million in 2023, this trend is considered a major driver for future performance.
• The company has also reduced gross and net leverage, via an updated capital allocation strategy, which places higher emphasis on organic growth and lower focus on M&A. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2024.
• We expect up to four changes in the KOSPI 200 index during the June 2024 index rebal event (down from 5 expected last month)  based on the latest available data.

• The prospect of this IPO mirroring the post-listing rallies seen with Ecopro Materials is what keeps local institutions fixated on this IPO despite valuation issues.
• The key factors are speculative trading frenzy among local retail investors and subsequent passive inflows through early entry into KOSPI 200/MSCI Standard.
• Considering two factors is vital. Hyundai Marine Solution’s IPO size is twice Ecopro Materials’, potentially limiting speculative buying. Sector-wide rallies, crucial for Ecopro Materials, haven’t been as prominent in shipbuilding.

Carr’s Group has announced an updated strategy that offers the potential for value realisation and creation from a number of avenues. These include: value realisation of the Engineering Division; the ability to significantly reduce central costs; and longer-term value creation in the Agriculture Division as a focused business with recovery potential and a strategy to leverage its strong market positions for growth.

• Kondotec Inc (7438 JP) is a wholesaler of construction materials in the same league as companies such as Okabe Co., Ltd. (TSE PRM: 5959).
• In FY03/23, sales amounted to JPY75.4bn (+14.1% YoY), operating profit came to JPY4.4bn (+21.2% YoY), recurring profit was JPY4.6bn, and net income attributable to owners of the parent was JPY2.4bn.
• Kondotec Inc. announced changes to its lineup of representative directors (a change of president).

• ASGN Incorporated recently held its fourth quarter and full year 2023 earnings call.
• The company reported solid results for the fourth quarter with revenues, gross margin and adjusted EBITDA margin all landing at the upper end or above their respective guidance ranges.
• The annual revenue for 2023 amounted to approximately $4.5 billion, $2.4 billion of which was attributed to commercial and government IT consulting work.

• Sensata Technologies fourth quarter and full year 2023 earnings revealed several key points investors may consider.
• With growth in electrification revenue by approximately 50% year-over-year to $700 million in 2023, this trend is considered a major driver for future performance.
• The company has also reduced gross and net leverage, via an updated capital allocation strategy, which places higher emphasis on organic growth and lower focus on M&A. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.